In his parents' mind he is a total success: their son, the masters student at Cambridge. In his mind, he is a cheat. Because what mum and dad do not know is that late at night their 24-year-old son writes essays for other students for cash. He has made £2,500 so far on 10 assignments of between 1,500 and 16,000 words.

"It's an ethical battle I'm finding very difficult to win," he says. "I am constantly thinking 'what happens if someone finds me out?'. It would come as more than a shock to my friends and family."

It started when he picked up a flyer for Oxbridge Essays in a Cambridge college a few months ago. He had already seen the essay mill's adverts in the student press.

"My motivation is that I'm paying for my studies and that I'm an overseas student," he says. "The cost has frankly been overwhelming. I'm £40,000 in debt and that's with scholarships worth £10,000.

"But I know that what I have written will often be submitted just as it is by the student who commissioned it. It's a worry and a risk, but also sad that my studies have to be supported in this way."

Oxbridge Essays offers custom-made undergraduate and masters essays, and even PhD theses, for between £80 and £21,250. A 12,000-word essay would earn the writer £600, for example. The company says the work it provides is guaranteed to be the standard of a first or a 2:1.The company, which was started two years ago and is based in Shillington, Hertfordshire, says it "provides model examples of academic research that are intended to be used by clients as inspiration for their own work".

"Our services could only be construed as cheating if model work was handed in by clients as their own - something we strongly discourage," its website says. But why then are stylistic considerations so heavily emphasised in its guidelines for essay writers, ask its critics.

The firm will not disclose how many students buy its essays. But it cannot be doing too badly. This year it had the resources to advertise three scholarships of up to £5,000 to present or former postgraduate students prepared to write masters and PhD essays.

All of which, say Oxford and Cambridge, contribute to plagiarism at best and cheating at worst.

Oxford University says there were 16 cases of suspected plagiarism investigated between March 2006 and 2007. There were 11 in the same period the year before. Cambridge has investigated approximately 30 cases of suspected plagiarism by undergraduates and postgraduates this academic year. The year before, there were about five.

This is more to do with a heightened awareness of plagiarism than the growth of essay mills, says Dr Laurie Friday, secretary of the board of graduate studies at Cambridge. But essay mills are none the less an increasing worry. Until now, the two universities have relied heavily on the intimate nature of their teaching to detect any hint of academic malpractice.

"We cling to the fact that we teach students so closely that we know them quite well," says Friday. "The chance of them doing things that we don't know about or disapprove of seems small. But that's not to say that we have denied it goes on."

Cambridge's board of graduate studies met in February to discuss Oxbridge Essays. It decided to make it clearer to students in its admissions brochures that they are expected not to buy from or be employed by essay mills.

In the past 18 months, all faculties have created their own statements on plagiarism for their subject handbooks. Some teach the statements to students.

The university is creating a website explaining what counts as plagiarism to go live this month and will also hold a plagiarism awareness day. "It is really, really hard to say how much of a problem Oxbridge Essays is," says Friday.

"The cases of suspected plagiarism that we know about are mostly graduates and are more likely to be masters than PhD students, although we do have a job to do with PhD students on this, too. With graduate students we have a much more international group. But this is by no means confined to overseas students. It is more likely to be graduates because our undergraduates have very little coursework that counts towards their degree apart from unseen exams.

"We have expressed strong disapproval of Oxbridge Essays and the scholarships it offers. It is clearly an offence to submit any work that has been bought from an essay bank or ghost written. If we detect this, we will use our disciplinary routes.

"We see Oxbridge Essays as a deliberate attempt to undermine the academic integrity of this and other universities.

"If a graduate of ours is found to be writing for them, they are bringing the university into disrepute. If a student gets a better class of degree than they deserve, then their employer is defrauded and may think lower of Cambridge University. It is really hard to exercise control over our former students though. We have to try to have control over the students we have now.

"Our masters and PhD students can only take on a certain number of hours of employed work. PhD students, for example, are allowed to take on six hours per term for payment. We expect that to be academic-related work and that doesn't include Oxbridge Essays," Friday continues.

"We don't want our students to be staying up all night writing essays for other people. They have better things to do. It is simply a waste of a good education. We are here to develop students' intellectual capacity. If they buy essays off the peg, they are wasting their time and money."

Turning to turnitin

Cambridge signed up to turnitin, plagiarism detection software, for about £8,000 a year this month. Oxford did the same at Christmas for £8,200.

Oxford's proctors have proposed new regulations making it a disciplinary offence for any student to use Oxbridge Essays. This will be submitted to Congregation, the dons' parliament, because it is a proposed amendment to one of the university's statutes.

Oxford students will also soon have to sign a statement that says they have consulted the university's new plagiarism website with each written assignment. "We see plagiarism as an educational problem rather than a discipline one," says Professor Elizabeth Fallaize, pro vice-chancellor for education at Oxford.

"It is really about educating students on refereeing and other areas. We know that a lot of our plagiarism cases are foreign students whose first language is not English and perhaps have an anxiety about writing in English. We try to address that.

"It is so sad that a student should be prepared to undermine a degree in this way."

Patrick Leonard, academic affairs officer at Cambridge University's student union, says essay mills such as Oxbridge Essays make a mockery of higher education. But he says they cannot be held entirely to blame. "Oxbridge students are writing these essays because they want extra money. If they want extra money because they need it, then the university and government have a problem to address."

To which Fallaize says: "We are in a deficit budget. We are trying everything we can to help students with their finances."

And Friday agrees: "I have huge sympathy with students who say they need the money, but we can't afford to pay all students to have a scholarship."

And what do those who own the essay mills say?

Just another source

Barclay Littlewood, co-owner of www.oxbridgegraduates.com, believes he is providing a useful service which shows universities that they teach students in the wrong way. "Our message is clear to all students. Come and use us, but use us properly like any other source and then go and write your own piece," he says.

"[We do it] to ensure that essays are phased out of the UK academic system and universities are held to account for the substandard skills they have been teaching students for far too long.

"We aim to highlight the flaws in a system that no longer works in this information-rich age. [Universities] must realise that the mass grading of intellect through essays and the promotion of academia, at the expense of teaching real practical skills that will help prepare students for the workplace in the UK, is nothing less than tantamount to profiteering and fraud."

'The only people who'll know are you and us'

The website of Oxbridge Essays boasts: "The principal advantage of working for Oxbridge Essays is financial. A next-day top 1st essay earns a writer £800. A few such pieces and one's student-loan look [sic] much smaller!"

Lucy Tobin, who is a student at Oxford, called the company for Education Guardian to ask a few ethical and practical questions about what it would be like to work as a secret essay-writer.

Oxbridge Essays: Hello, Oxbridge Essays.

Lucy Tobin: Hi, I'm a student at Oxford, and I'm interested in doing some work as a writer for Oxbridge Essays. I just wanted to find out more about it. How does the process work?

OE: Sure. Once you've completed the application and signed our legal document, we add you to our email list and then every day you'll receive emails with details of the work available, fee and time frame. If you're interested in an essay, you reply and your bid will be compared with all the others we receive, so it may be two or three or could just be you. Your bid's success rate is based on the level of your Oxbridge qualification, if you're an undergrad, or doing a masters, or a second degree, for example, plus your experience writing for us. For the average writer, about 50% of their bids are accepted, but for someone who is highly rated in our eyes, because of the high quality of their past work, it's more likely to be around 70%. What do you study?

LT: I'm halfway through my degree, I'm studying English literature.

OE: OK.

LT: What's the pay like?

OE: It depends a lot on the time period involved, and the length. But let's take an average ... Say for an undergraduate essay on English lit that needs to be 2,500 words, which you had six days to write - for that you would get about £100. But it ranges - a next-day essay can be £600-700 ... For, say, a dissertation, it can take up to 15 days and you'd get much more money. If they feel confident doing so, we also encourage people to write on subjects related to theirs, so there's more available and that's a way to earn more money.

LT: OK. And how many essays does each of your employed writers usually write?

OE: It's hard to say exactly. We have about 600-700 people writing for us.

LT: Would the essays be used entirely as an essay by the paying student - would the paying student hand in my work?

OE: No, it's model research that you're writing. The essays can't be handed in, we make that clear. Have you looked at our website? Have a look at the Write For Us section. What's your name? Are you at Oxford?

LT: Kelly Robson. Yes, I'm at Oxford. But it's making me think ... how ethical is the whole thing?

OE: That's a judgment you have to make. It's up to you to decide.

LT: Sure. But is it completely anonymous? Could I get found out? I mean, I don't think Oxford would ...

OE: No, your information is absolutely confidential. Over the year we've been running, we've never had a single writer who's had a bad experience. The only people who'll know you work for us are you and the people in the office here, unless you tell anyone else. We've written to both of the universities a few times, and they've said there are no regulations against people working for us. Obviously, they're not happy about it ... but there's nothing they can do. The service we offer is not illegal.

LT: But can't they find out through the emails you send? Especially if they're going to be sent to my university email account?

OE: That's highly illegal, and it's a misconception that they can do that. You've got privacy laws. We'll need a verification email from your Oxford account to prove that you go to the university, but that can be a blank message. It just has to be sent from that account. After that point, you can use your private email. You have a Hotmail or Gmail account, right?

LT: Yes. One more thing I wondered, though. Do academics write for you too?

OE: Yes, some junior academics from Oxford and Cambridge write for us. Also people working in the City, graduates, undergraduates. If you go on the website, fill in the forms, we can go ahead from there.

LT: OK, thanks for your help. Bye.

OE: No problem. Bye.

I did sign up to the company in order to find out more about the way it works, but I would never work for it. I have to work hard to write my own essays for my degree, and I don't want other students to get off so lightly - or to have the temptation of plagiarism.